German Chancellor Friedrich Merz has called for closer cooperation and dialogue with China during his first visit to Beijing, aiming to reset relations strained by a widening trade imbalance.

In talks with Chinese President Xi Jinping, Merz said he wanted to deepen the “comprehensive strategic partnership” between the two countries. China remains Germany’s largest trading partner, making the relationship central to Berlin’s economic interests.

Xi welcomed the remarks, saying that stronger communication and mutual trust were vital in an increasingly uncertain global environment.

Trade gap raises concerns

Despite the positive tone, the visit comes amid growing concern in Germany over its trade deficit with China, which reached about €90 billion last year. Merz noted that the gap has widened significantly since 2020, largely due to excess production capacity in China.

German officials have also pointed to market distortions, including subsidies and currency issues, as well as supply chain risks. These concerns were highlighted when China tightened export controls on key materials such as rare earths and basic chips, affecting German manufacturers.

Merz acknowledged both the opportunities and risks in the relationship, stressing the need for a more balanced approach.

 Europe rethinks China strategy

The visit follows similar trips by other European leaders as the region reassesses its ties with China amid uncertainty in relations with the United States.

Germany, whose economy is still recovering after two years of recession, continues to rely on China’s large market and industrial strength. However, businesses are increasingly adopting “de-risking” strategies to reduce dependence.

Merz is expected to visit Washington next week, reflecting Berlin’s effort to balance its relationships with major global powers.

Limited deals, cautious progress

While both sides described the talks as constructive, the agreements signed were limited in scope. They covered areas such as climate cooperation, green transition, animal health, and sports exchanges.

China signalled its willingness to import more German goods and encouraged Chinese firms to invest in Germany. It also highlighted cooperation in sectors such as automobiles, chemicals, artificial intelligence, and biomedicine.

Merz said China had ordered 120 aircraft from Airbus, offering a boost to European industry.

Even so, the modest agreements underline a cautious approach, as Germany seeks to strengthen ties with China while managing economic risks and strategic concerns.

(with inputs from Reuters)